China slowdown prompts Moody’s downgrades

Moody’s decision to downgrade its credit-rating outlook for China to negative from stable has trickled down to the country’s insurance industry.

A day after announcing the credit-rating outlook, Moody’s revealed that it has also changed to negative from stable the rating outlook of seven Chinese and Hong Kong insurers.

One Chinese insurer’s rating outlook was also changed from positive to negative.

The affected insurers include China Life Insurance, China Life Insurance (Overseas), China Life P&C Insurance, PICC Property and Casualty, PICC Life Insurance, China Pacific Property Insurance, ICBC-AXA Assurance, and BOC Group Life Assurance.

The change in the outlook to negative indicates that the central government’s capability to support insurers on a broad basis could be weaker than previously assessed, Moody’s said in a statement posted on its website.

Moody’s, however, affirmed all the ratings of the seven insurers.

The agency also stressed that the rating outlook of the insurers can be changed to stable if the rating outlook for China returns to stable.